Indian Light Duty Vehicles have the best fuel economy among emerging nations: IEA report

New Delhi: An analysis of fuel economy of Light Duty Vehicles (LDVs) across all major car markets in the world has shown Indian LDVs to be the most fuel economic – consuming the least amount of fuel per kilometer – apart from Italy, France, and Turkey. When compared with all the emerging economies, India is ranked the best, according to a report by the International Energy Agency (IEA).

“Italy, France, Turkey, and India have the lowest average specific fuel consumption of all major car markets examined, with values equal to 5.4 gasoline equivalent (Lge) per 100 km or lower. Most emerging economies have fuel economies between 7.0 Lge/100 km and 8.4 Lge/100 km, with the exception of India (5.6 Lge/100 km) and Ukraine (6.8 Lge/100 km),” said the report titled "Fuel Economy in Major Car Markets".

The increasing share of LDVs sold in emerging economies accounted for most of the additions to the world’s vehicle stock in 2017. The starkest example is China where new registrations increased 17 per cent per year between 2005 and 2017 and India with 9 per cent growth rate.

According to the report, the average fuel consumption of emerging economies was rather close to the average of all advanced economies and the global average in 2017. “The main exception is India, with average fuel consumption that consistently has been around 25 per cent lower than the average of all emerging economies since 2005. Excluding India, the average fuel consumption in emerging economies would have been 0.2 Lge/100 km higher in 2017,” the report said.

About 3.4 million LDVs were sold in India in 2017 making it the fifth-largest LDV market in the world. The on-road stock was about 35.6 million, implying ownership of about 0.03 LDVs per capita. This is the lowest car ownership level among the countries covered in the database.

The prospects for future LDV sales in India are strong with significant increases in vehicle ownership likely when personal income approaches and exceeds $5,000 per year.

In 2014, the government adopted new CO2 emission regulations. The standard set a fleet target of 130 gram of CO2 per kilometre (g CO2/km), which came into effect in 2017. In 2022, this standard would tighten to 113 g of CO2/km.

India recently announced a number of policy measures related to electric vehicles (EVs) that demonstrate high ambition to transition the vehicle market to EVs. In April 2017, the government outlined a vision to have an all-EV fleet by 2030. This followed the establishment of the "National Electric Mobility Mission Plan (NEMMP) 2020" in 2012, which aims to promote hybrids and EVs.

It followed the development of the Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicles (FAME) scheme. It is an incentive scheme that reduces the upfront purchase price of hybrids and EVs launched in 2015 under the NEMMP 2020 to stimulate early adoption and market support for hybrids and EVs.

In May 2017, NITI Aayog outlined a vision for the transformation of mobility, proposing a set of solutions to accelerate India’s leadership in advanced mobility. In 2018, the Ministry of Power launched a National E-Mobility Programme to be implemented by Energy Efficiency Service Limited (EESL). EESL is expected to focus on public procurement to facilitate demand creation for EVs. It launched an EV procurement tender in March 2018.

In early 2019, India released FAME Phase-II, providing subsidies for all electric vehicle types (including LDVs) and charging infrastructure. The scheme covers Rs 10,000 per kWh of battery for up to 35,000 EVs until 2022.